Michael Holthouse‘s daughter, Lissa, then 10 years old, wanted a pet turtle, but her parents refused to buy her one. So, as you might expect from the child of a highly successful entrepreneur, Lissa decided to start a lemonade stand so that she could make the money to buy her own turtle.

Holthouse helped his daughter with the project, and in the process, discovered a rich opportunity for valuable lessons about business.

“It was fascinating,” he said, recalling their impromptu discussions about location, marketing, capital expenditures, and profit. His daughter was excited about making money to work toward her goal, and therefore enthusiastically internalized the business lessons. The day was so rewarding for Holthouse, it spurred him to action. “It really got me thinking. What if we could create this kind of experience for a million youth across America?”

Four years later, Holthouse is making that dream a reality through Lemonade Day, a nationwide event that teaches thousands of kids the steps to successful entrepreneurship through lemonade stands.

Holthouse recently visited Mays to accept the Conn Family Entrepreneurial Leadership Award presented by the Center for New Ventures and Entrepreneurship (CNVE). He spoke with students about what it takes to become a successful entrepreneurâ€”at any age.

“A life-changing event”

Holthouse’s career in IT culminated in selling his computer networking company, Paranet Inc, for what he termed “an obscene amount” to Sprint in 1997. “I worked really hard, served a lot of customers, andâ€¦achieved what I think most people believe is the American Dream,” he said. Rather than start another company, Holthouse decided to use his business savvy to serve others: He started the Holthouse Foundation for Kids, which provides grants for organizations that serve at-risk youth. “I’ve always had a passion for serving youth,” he said, commenting that there are many kids in Houston, where he resides, that are highly capable intellectually, but who may never succeed due to lack of opportunities or role models.

Holthouse thanks the staff manning a Lemonade Day stand set up outside the Wehner Building. His non-profit organization, Prepared 4 Life, operates the Lemonade Day project to teach kids about business ownership through experience. (view more photos)

After his encounter with his daughter and the lemonade stand, he launched the non-profit Prepared 4 Life, which teaches kids about business ownership through experience. “This is a life changing event for so many kids,” he says, as for many participants it can be an introduction to personal and professional success.

“So many youth in America have never been told that there is a step-by-step process that you can actually follow, and, if you dare to dream a little, and you’re willing to put in the work, you can achieve anything in the world you want to achieve,” says Holthouse. The Lemonade Day program involves a month of preparation that teaches kids those steps toward running a successful business: goal setting; business plan creation; finding an investor and securing funding; advertising; purchasing; accounting; operations; and after profit is realized, spending, saving and giving back. Holthouse stresses the importance of philanthropy to every participant, as each is encouraged to donate a portion of their proceeds to their favorite charity.

In 2009, kids in Houston operated over 27,000 stands on Lemonade Day, resulting in the sale of 2.2 million glasses of lemonade at the average price of $1.14.To highlight giving back Holthouse noted the Houston kids donated more than $500,000 of their day’s profits to charitable causes. “This is real moneyâ€¦It’s an impressive thing,” he says, noting that the process they go through is as applicable to becoming successful at anything as it is to becoming a lemonade vendor.

Holthouse’s goal is to reach a million kids in 100 cities by 2014 with this program. They currently have 12 locations, including four in Texas, and hundreds of thousands of participants. “Can you imagine what that would mean for the economy if every year, we created a million new youth entrepreneurs?”

Advice for entrepreneurs: Focus on your EQ

Business success has a little to do with your IQ, Holthouse told Mays students, and a lot to do with your EQ, your emotional quotientâ€”those soft skills like communication, teamwork, and professionalism that are essential in the workplace. He encouraged students to do more than study while in college: join organizations, take on leadership roles, volunteer, network. When you are looking for a job or starting your own business, the skills you learn outside the classroom, such as ethics and self-discipline, will greatly outweigh the textbook knowledge you’ve acquired, he says.

Holthouse encouraged students to find which products and services are going to be in demand tomorrow and start working to create them today. (view more photos)

That kind of experiential learning is the key to his Lemonade Day venture, and a needed change to most grade school curriculums. Holthouse commented that in school young people are taught how to read and how to do well on tests, but not how to think or act. It’s emotional intelligence that Holthouse strives to inculcate in the youth he encounters, as he says it isn’t taught at school. Rather, it’s generally the responsibility of parents and families, meaning that an otherwise promising young person may miss out on success due to lack of emotional intelligence stressed in the home.

“There have been lots and lots of studies that say what makes a person successful in life. Interestingly enough, although academics are extremely important, those aren’t the keys that will make you successful in life. It’s your ability to communicate, to get along with others, to work in teams and to lead teams, to have a moral compass that guides what you do, and a vision in your life to become successful.”

A student asked Holthouse, what is the hardest part of being an entrepreneur? Stepping out and taking that first big risk, leaving the security of a corporate job, he says. Also, a major challenge is growth. Each time your company doubles in size, you must reinvent your internal processes, because they likely won’t work anymore. One thing more: an entrepreneur must be a little bit clairvoyant. They must be able to identify which products and services are going to be in demand tomorrow and start working to create them today. Your iPhones will be doorstops in five years, he told students, suggesting that they start to imagine what will replace them.

It’s that emphasis on vision that garnered Holthouse the award from the CNVE. Given in honor of C.W. and Dorothy Conn of Conn’s Appliances, this annual award is presented to a successful business leader that exemplifies entrepreneurial vision as well as managerial insight and business acumen. Past recipients have included L. Lowry Mays of Clear Channel Communications, President of Apex, Inc. Dr. Nancy Chang, Pizza Hut co-founder Frank L. Carney, Administaff co-founder Paul J. Sarvadi, Mustang Engineering founder Paul Redmon, TXU Former Chairman and Chief Executive Officer Erle Nye, and Jason’s Deli founder Joe Tortorice.

“C.W. [Conn] was the consummate entrepreneur,” said Richard Lester, clinical associate professor and executive director of the CNVE, mentioning Conn’s achievements, as he became the largest appliance retailer in Texas. In 1999, Conn provided an endowment to Mays to bring renowned entrepreneurs like Holthouse into the classroom. While the primary purpose of the award is to honor a successful entrepreneur, the secondary purpose is to give students an opportunity to interact with and learn from the honoree. “[C.W.] clearly believed in the power of education and of entrepreneurship education.”